PCR todays exam

Anne55 wrote:

Did nobody else think this was REALLY hard!?

FATBOY wrote:

Was it me or did anyone else get confused by question 1.1? I couldn't work our if we were supposed to analyse period 1-4 or 2-5. It wasnt very clear... Help!!!!!

Task 1.2 (c) Memo
To: The Board of Directors Date: December 7th 2006
From: Sandy Hood

Reducing the production of stocks of Keyfits

(i) The implications
The limit on the material available in each of the periods has led to a revision in the production budget. Rathert than have 18,000 units in stock at the end of period 1, this budget shows only 8,200. In the subsequent periods this will also be lower than originally budgeted.



Because of the lower production, labour costs of almost £384,000 will also be saved.
Lower stocks will require less storage space and lower financing costs.
Keyfits are new products and our forecast sales may have been based on market research.
However, the likely accuracy must be questioned. The original production budget built in sufficient stocks to deal with demand outstripping the forecast. We will now have much less of a cushion.


(ii) Techniques useful when forecasting sales
The examiner only asked for 2 of these 3 Strategic Considerations show us where the senior management are planning to take
the company. If Keyfits are seen as a product that will spearhead Kando moving into
a new market which will then become a sourse of revenue for other products that is
likely to mean that sales are more likely to be supported by extensive advertising and
promotion to achieve this. When we know this, we know that forecast sales need to
have built in such extra support over and above any survey results.
External Analysis Most business school courses incorporate analysis of the
various external environments affecting business. These can include the political or
legal influences. In the security industry, one recent law has been that bouncers (or door attendants) are licenced. If the lay required everyone with a licence to carry a Keyfit, this would be very important to any budget.


Other external environments include: sociological, economic and technological. Changes in any should be recognised in any good sales forecasting.

Internal Analysis The business needs to be well aware of its own strengths
and weaknesses. We expect that three hours are sufficient for our workforce to make one Keyfit. But that may be because they are very good at that type of work. If the production level shot up beyond the number our current workforce are capable of producing then new staff may be much slower as they will need the necessary training.



When looking at sales forecasting we need to be very much aware of our capabilities.
Related to this we also need to be aware when large numbers of staff are likely to leave and the need to have profficient replacements when that happens.


(iii) Factors to take into account when considering the life-cycle of the Keyfit
1 Products in the security industry are likely to have short life cycles as criminals may try to
overcome the value in one way or another. This is likely to mean that Kando will need to
start developing newer improved Keyfit products as the criminals find ways around the
current one. This will lead to fairly rapid introductory phases and short periods of maturity
before the next product then appears and takes over.
2 As stocks will become obsolete when the Keyfit is superseeded, the point when the new products start to appear ought to be a signal to stop producing for stock

11 3 hour classes

4 whole days

1 day revision classes